Canada and Kyoto:

Meeting a Carbon Equilibrium

Monday 1 July 2002, by Stephanie FELKAI

Canada recently published a discussion paper on climate change that is calling for consultation with all Canadians. It’s a step towards fulfilling our climate change commitments, made in 1997 at the signing of the Kyoto Protocol. Critics are wondering whether it will be a step in the right direction.

"Ultimately the [climate] has to be at equilibrium, carbon emissions have to equal carbon extractions," says Peter Brown, director of the McGill School of the Environment. "The best time to plant a tree was 50 years ago, the second best time is now," said Brown with reference to an old forestry saying. The first evidence of climate change emerged in the late 1970s, although very little was done at the time. "We have to make an extremely large cut [in carbon emissions] and Kyoto (an international agreement to reduce greenhouse gas [GHG] emissions to an average during 2008-2012 of 6% below 1990 level) is not remotely adequate."

The federal government’s Discussion Paper states that "addressing climate change means moving to fundamentally different ways of producing and using energy."

Drastic cuts in carbon emissions will have an impact on Canadian industry. Despite the assurance of the first condition of the Federal government in addressing climate change - that no region of the country should be asked to bear an unreasonable burden - Albertans are nervous. In a speech to the Alberta Chamber of Commerce, Premier Ralph Klein appropriated the term "sustainability" for the protection of the Alberta Advantage (a name encompassing the social, economic and natural factors that makes Alberta a nice place to live), saying "the Kyoto Protocol is not the answer: not for Alberta, and not for Canada."

The Canadian Association of Petroleum Producers (CAPP) has produced a document addressing their concerns about the Kyoto protocol calling for recognition of Canada’s significant energy production role in a competitive and integrated market with the US and Mexico. They remind us that "The government of Canada publicly acknowledges that additional development of the petroleum sector is critical to our country’s energy security, balance of payments, employment rate and tax base. The Federal government has repeatedly signaled its support for growth in our sector."

Perhaps Alberta and the CAPP just haven’t tried hard enough. The Climate Change Discussion Paper sites some successful examples of Canadian and multinational companies including vehicle manufacturers and British Petroleum, who’ve cut production costs by cutting GHG emissions and by taking more energy efficient measures. IBM, for example, has saved $50 million after applying its energy efficient measures and many others have reached their emissions targets years ahead of schedule.

The GDP Argument

The estimated impact of ratifying the Kyoto Protocol would cost Canada between 0 and 2% of its gross domestic product (GDP). However, Brown doesn’t believe that this measure is an accurate indicator of the benefits to Canadians because teh costs of treating illnesses like lung disease and cancer also contribute to GDP growth. He says that a 2% reduction in GDP in 2012, doesn’t mean we will be any worse off, rather we could be better off because we might have fewer cases of emphysema or fewer cases of asthma.

"Canada’s competitiveness, when defined broadly, is likely to benefit, not suffer, from a decision by the federal government to ratify the Kyoto Protocol" states the Pembina institute, a non-profit environmental policy research and education organization.

"I think Kyoto is an opportunity for Canada, not a burden," says Brown. "It’s a good opportunity for Canada to say we’re going to put our economy on a different path, the path of the future. The US is on the path of the past. And we’re going to outstrip the US; in economic performance, in innovation, in new technologies, in new jobs created by new technologies. We have a very well-educated population in Canada. For me it’s a turning point".

The Next Step

The details of the plan are still being finalised. A draft plan is expected this autumn once consultations have taken place and one of four options chosen. The options are a mix of Domestic Emissions Trading (DET), targeted policy measures and international emission trading permits.

Brown prefers options that use the DET scheme. This system will encourage companies to adopt innovation to increase energy efficiency and reduce GHG emissions. It will also take advantage of the market and companies will be required to hold a permit for each tonne of GHG they release. He also dislikes the proposition of Canada’s buying credits under Kyoto’s International Emissions Trading mechanism saying "I don’t see any need to buy our way out of this problem by buying unreliable contracts from other countries."

Trading credits internationally depends on other countries where we have little control. These countries may not do what they say they will do. Brown says "before you go to things like [buying international credits] you have to take substantial steps domestically".

"The way I’m looking at this is that one, Canadians are willing to sacrifice for the common good, and many of them want to sacrifice for things they believe in. Second, there isn’t much sacrifice here [GDP lumps costs and benefits together]. And third, this should be viewed as an opportunity to make a turn that the US isn’t going to make."

The author is an intern of the program "Surfin’ the world" at Alternatives.

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